The hype around so-called “peanut butter” raises that distribute equal payments to every worker is falling flat as AI divides the workplace into super users and stragglers.
This disparity between employees challenges the idea behind “peanut butter raises,” which aim to address some of the criticisms with merit raises, namely, that they are subjective and bias-prone, according to Payscale’s report.
While across-the-board raises may seem equal on the surface, high performers or AI super users may not see it that way, said Hannah Yardley, the chief people and culture officer at Achievers, a software company that tracks employee recognition and offers rewards.
“If you’re just being rewarded the same way as everybody else, or being told you’re doing the same job with everyone else, you’re going to feel that it’s equal, but not fair, if you’re contributing more to to the outcomes of what you’ve been asked,” she said.
Factors like performance, but also market competitiveness and internal equity also play an important role in pay decisions, added Mercer senior principal Mark Bowling.
“Fairness in compensation often involves more than equal treatment,” he told Fortune.
Because not all employee contributions are equal, organizations wanting to leverage AI should institute performance-based raises, but they should also be constantly recognizing employees that go above and beyond so others in the organization know what the company’s priorities are, Yardley said.
“Not all work is created equal, and so for organizations, they should be differentiating in order to be able to set that standard for what value really means in the way that you’re delivering,” she told Fortune.
